Gulf Coast refineries process lighter crude oil from Permian Basin

by Talk Business & Politics staff ( 197 views 

The density of crude oil that’s processed by U.S. refineries along the Gulf Coast has become lighter since 2008 when the refineries shifted from heavier imported crude oil to lighter crude oil produced in Texas, according to the U.S. Energy Information Administration. The Gulf Coast has the majority of petroleum refineries in the United States, and they run a mix of crude oils, which have become lighter since 2008.

API gravity is a measure of crude oil density that refineries use to make decisions about the types of crude oil to process. Crude oil with a higher API gravity is lighter or less dense. Changes in the API gravity of the mix of crude oils that refineries process can affect their profitability and the shares of petroleum products produced.

Between 1985 and 2008, crude oil inputs to refineries in the Gulf Coast became heavier, from an API gravity of 34.1 degrees to 29.5 degrees. Between 1985 and 2004, imported crude oil processed in the Gulf Coast rose from 1.4 million barrels per day to 5.8 million barrels per day. Between 2008 and 2017, the API gravity of crude oil inputs to refineries in the Gulf Coast increased to 32 degrees and imported crude oil processed in the region declined to 3.1 million barrels per day.

Most crude oil imports to the Gulf Coast are heavy, with 46% of the imports having an API gravity of less than 27 degrees in 2009. In 2017, 71% of the imports had an API gravity of less than 27 degrees.

Gulf Coast refineries have been substituting imported crude oil with domestic crude oil, and since 2015, the majority of domestic crude oil processed by refineries in the Gulf Coast has been light, with an API gravity of at least 40.1 degrees. The domestic crude oil has come from the Permian Basin, which produces mostly light oil from tight formations.

The Gulf Coast region includes five refining districts: Texas Gulf Coast, Texas Inland, New Mexico, Louisiana Gulf Coast and Northern Louisiana and Arkansas.